Why a Schedule of Values Is Essential for Your Construction Project

Construction projects exist in the real world. Unlike creative arts or software, there’s a tangible, physical building at the end. But that building only comes together because everyone, from project owners to contractors and subcontractors, agrees on what needs to be done, how it will be delivered and how much it will cost.

Part of that agreement is the Schedule of Values (SOV). It’s one of the most important documents in any construction project. The SOV sets out the total contract amount, broken down into individual work items with assigned values.

So, what exactly is a Schedule of Values? What should it include? And why is it so fundamental to successful project delivery? Let’s take a closer look.

What Is a Schedule of Values and Its Purpose in Construction?

The Schedule of Values (SOV) is a construction document that lists the project’s scope. It itemises every activity required in a construction project and assigns them a monetary value.

The SOV is invaluable to project management, as it tells them what’s been done, what needs to be done, and how much it all costs. Everyone from the accountants to the builders will use the SOV at some point. Its importance cannot be understated. It’s the foundation for billing, steady cash flow for contractors, and a well-organised project.

What Should a Typical Schedule of Values Include?

A Schedule of Values is always put together before the foundations are laid. In fact, you could think of it as the foundation for the project itself.

But what goes into the SOV? Here are some examples of typical Schedule of Values line items and what each covers:

• Line Items: Individual scopes or trades within the project
• Work Description: Clear summary of each activity
• Assigned Value: Cost allocated to each line
• Total Contract Value: Overall agreed project amount
• Payment Structure: How progress claims are submitted
• Retainage: Held-back amounts, if applicable
• Change Allowances: Provisional sums or variations
• Cost Codes: Internal budget references
• Approvals: Owner and contractor sign-off

As you can see, an SOV isn’t something you can compile after the fact. It defines almost every aspect of a project’s finances and expected work. It even details potential change order allowances.

The Key Benefits of Using a Schedule of Values

A SOV creates and maintains order across construction projects. Other benefits include:

Facilitates Accurate Billing and Payments

The SOV is used almost every time a contractor requests and receives payments for completed work. They will cite the specific line in the SOV and expect the listed payment. This is known as progress billing and payment applications. The core benefit is that it reduces disagreements. Everyone knows before the project begins what a specific task is quoted to cost. The contractor can therefore expect fair compensation for the work, and suppliers know they’ll be paid on time.

Improves Project Management

Project managers (PMs) have to monitor lots of moving parts. Having a central document that details line by line everything a project has to cover is a lifesaver (and timesaver).

PMs can compare the actual completion of work to the scheduled values specified in the SOV. It’s a perfect template for the project, and any deviation can be flagged. They can spot potential issues ahead of time, check for delays, and implement corrective measures to turn things around.

Read more about how construction software alongside an SOV can transform project management.

Enhances Accountability and Documentation

What’s true for project managers monitoring for delays is true across the whole project. When something is in writing (agreed by everyone) it becomes the standard by which everything is measured. That’s accountability in a nutshell. Contractors can’t suddenly say they didn’t know about a deadline or that their fee isn’t correct. Because it was all agreed to.

Of course, things can still go wrong. But now, the relevant stakeholders have to defend why they’ve gone wrong against the initial estimate. That creates documentation, which provides a solid audit trail across a construction project.

Supports Risk Management

Breaking the contract into clearly priced work packages reduces ambiguity about what’s included, what’s been completed, and what still needs to be done.

That goes a long way to mitigating risk on a project. There’s less likely to be disputes over payments, scope changes, or partially finished work — all of which can stall progress or escalate into legal issues. If and when variations arise, the SOV provides the logical baseline for all discussions, from change orders to pay negotiations.

Can a Schedule of Values Be Modified After a Project Starts?

In short, yes. A Schedule of Values is an official, concrete document. But saying that it’s not set in stone. What’s the point, then? Well, even if it can be changed, changing it once a project is underway is a formal, agreed-upon process. Often, it’s detailed in the SOV itself.

Design changes, scope adjustments, unforeseen site conditions, or client requests are all a normal part of construction projects. As the project changes, the SOV should be updated accordingly.

That being said, changes should never be informal. Any revisions typically require:

• An approved change order or variation
• Updated line items or values in the SOV
• Review and sign-off from the relevant parties

The Risks of Not Having an Approved Schedule of Values

In a word: conflict.

Without a clear SOV, everything becomes subjective. No one agrees on what work is worth, when they should be paid, or even the project’s stages. That quickly strains relationships if invoices aren’t paid on time. Disagreements, if not resolved, also lead to contractual or legal conflicts. Companies can struggle to audit the project or to provide documentation to defend their original pricing estimates.

The SOV prevents all of this. It’s a simple tool for keeping a project financially disciplined, transparent, and on track.

Software Tools That Simplify Schedule of Values Creation and Management

Managing SOVs does not need to be manual, messy, or spreadsheet-heavy. With 4PS Construction Management Software, you can create, track, and update schedules of values in one central system alongside contracts, variations, and payment applications.

Book a demo today to see how 4PS helps construction teams stay in control of costs, reduce disputes, and keep projects moving.